London, UK: The Chancellor of the Exchequer is being urged to him to extend the eligibility criteria for the super-deduction tax allowance to include leasing and short-term hire, two of the most common ways that businesses acquire new plant and machinery.
Logistics UK, along with six other groups, has called on the chancellor to recognise that affordable leasing and short-term hire options are essential for logistics businesses to acquire the vital plant and machinery they need for their operations.
From 1 April 2021 to 31 March 2023, the super-deduction tax allowance enables companies to claim 130% capital allowances on qualifying plant and machinery investments, in effect, cutting a companies’ tax bill by 25p for every pound they invest in new equipment.
While the measure was designed to benefit businesses financially and operationally, the legislation excluded leasing and short-term hire, which are some of the most common ways plant and machinery are acquired by businesses, as Denise Beedell, public policy manager, Logistics UK comments:
“Logistics UK is pleased to join with other trade associations in calling on the Chancellor to extend the eligibility criteria for the SDA [super-deduction tax allowance] to include leasing and short-term hire.
“The logistics industry has risen to the challenge of keeping the supply chain going in the face of unprecedented obstacles and rising costs; including leasing and short-term hire would provide much needed support to this vital sector now also working to meet the even more testing challenge of the transition to net zero.”
Stephen Haddrill, director general, Finance & Leasing Association, said: “The era of buying plant and machinery outright is long gone. It’s so much more efficient for firms to lease or hire-in what they need when they need it, but the super deduction allowance simply does not support the realities of how modern businesses operate. The Chancellor has a real opportunity here to nurture productivity by getting the newest, cleanest and most efficient plant and machinery into the hands of business owners.”
The British Vehicle Rental and Leasing Association, Civil Engineering Contractors Association, Forum of Private Business, Finance & Leasing Association, Manufacturing Technologies Association and Association of Chartered Certified Accountantsm and Logistics UK have invitited officials to a discussion in Septemberto discuss the essential role leasing and short-term hire play in enabling business investment in equipment.
